Lonmin offers a peace deal to its striking miners. We speak to the South African trade minister.

And Bing it on. Microsoft says it's better at finding things than Google.

I'm Max Foster and this is QUEST MEANS BUSINESS.

Well, the intervention has, now, been unveiled and Mario Draghi says the ECB's bond-buying plan is a limitless, fully-effective backstop against the investors' unfounded fears. Let's take a look at the details, because there's lots of lingo involved.

Speaking in Frankfurt earlier, Draghi called it "outright money transactions" or OMTs. We will call it bond-buying. In plain English, once a eurozone state has asked for help via a European bailout fund, the ECB will buy that state's government debt from investors. That in turn should bring down dangerously high borrowing costs.

(BEGIN VIDEO CLIP)

MARIO DRAGHI, PRESIDENT, ECB: OMTs will be -- will enable us to address severe distortion in government bond markets, which originate from, in particularly, unfounded fears on the part of investors of the reversibility of the euro.

Hence, under appropriate conditions, we will have a fully-effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.

Let me repeat what I said last month. We act strictly within our mandate to maintain price stability over the medium term. We act independently in determining monetary policy. And the euro is irreversible.

(END VIDEO CLIP)

FOSTER: The ECB won't be a preferred creditor when it buys these bonds, so if a government defaults on its payments, the ECB will just as likely lose out as a private investor.

And OMTs aside, the bank decided to hold interest rates at a record low of 0.75 percent, and it lowered its growth outlook as well for the year, forecasting a bloc-wide contraction of up to 0.6 percent.

Investors, though, hardly reacted to Draghi's speech at first. It was only an hour after he had left the podium that stocks really began to advance well beyond their early gains. As you can see, all up 2, 3 percent, 1 percent only in Zurich, but nearly 2 percent.

And banks were the biggest gainers, really, by far. That's what the French index did. Credit Agricole up 8.4 percent, Societe Generale up 7.8 percent. Also, over in Germany, Deutsche Bank, a really big player, gaining 7 percent. Lloyd's up 6.7 percent, Credit Suisse up 5 percent, as well.

Lorenzo Bini Smaghi is a former ECB executive board member. He joins us from Rome now. First of all, sir, could you just explain your reaction to the Draghi speech? There was no great surprises, but were you pleased with what you heard?

(SILENCE)

FOSTER: Hello, can you hear me --

LORENZO BINI SMAGHI, FORMER BOARD MEMBER, ECB: Hello?

FOSTER: Lorenzo?

(SILENCE)

FOSTER: We have a sound problem. Just checking one last time.

BINI SMAGHI: Yes. I can't hear.

FOSTER: I think what we're going to do is come back to him in just a moment. But we're also going to be talking about Greece plays into this, of course. Greece was at the epicenter of the debt crisis that really has spread across Europe and we're dealing with now.

George Papandreou was the country's prime minister when it all started to unfold, and he joins us now, live from the US Democratic National Convention, actually, in Charlotte in North Carolina. Thank you so much for joining us.

So, what do you make of Mario Draghi's latest moves? This bond-buying program, which he implies isn't printing money.

GEORGE PAPANDREOU, FORMER PRIME MINISTER OF GREECE: Well, Mr. Foster, I think what we are seeing now is that, in fact, Europe is now getting its act together. I would say finally getting its act together. First of all, because this is a very strong intervention into the markets -- the bond markets.

And I think secondly what it indicates is that we are moving away from a narrative which said that if each country alone just put its house in order, whether it's Greece, or Italy, or Spain, or Portugal and Ireland, that that would be enough.

There is a deeper, systemic question of trust towards the eurozone, and that is what is trying to be addressed, I think it will be addressed by Mario Draghi's announcement today.

If you add to that the announcements that the four heads of the institutions of the European Union will be making around the credit guarantees and banking union in the next few days, I think this shows a real move forward in getting our act together.

FOSTER: It has proved to be a solution of sorts, because there's been a short-term positive impact on the stock markets. The bond markets will be more stable, now, won't they? But it's not really a solution. It's just a stop-gap. It's not going to be a long-term solution. The long-term solution is fundamental economic reform, and that isn't making the progress that economists want.

PAPANDREOU: Well, economic reform in each country does take certain time. And I think if you take Greece, for example, there's been a myth that nothing has been done. Well, in fact, in two years, we cut our deficit by 6.5 percent. According to the OECD, we are number one in structural reforms of the industrialized, world. Number one, not number two.

So, there's a mythology about whether reform is being done or not, so I think this is the market sentiment that is pushing a deeper question. Are we getting our act together? Can we Europeans integrate deeper, and can we deal with the systemic problems the eurozone had from its inception?

And I think this -- I wouldn't say this is the final stage of the integration, but it certainly shows a very strong will.

And secondly, this intervention to the markets will have a direct effect on the bond markets. Mario Draghi said that even countries that are now in the bailout process and the adjustment program, as they go out onto the markets, they will also benefit by the ECB intervening into the markets if necessary.

Now, had the ECB done this --

(CROSSTALK)

FOSTER: But you wonder what this --

PAPANDREOU: Yes?

FOSTER: Sorry. You wonder what the ECB is really there to do, though. Because he made a comment today: this would address a bond market distortion, he said, and "unfounded fears of investors about the survival of the euro."

So, what he's doing is addressing unfounded fears. So, what's he doing? He's just sort of responding to markets. That's not his job, is it?

PAPANDREOU: Well, I think that one -- in this crisis, after 2007, 2008 Wall Street crisis, we have seen central banks, whether it's the Fed or the ECB, taking extraordinary measures. I would say that this is in their remit, if you think that they have to keep stability in the economic system and the financial systems.

Now, this does not mean that we don't have -- we still do not have -- we have a lot of work to do in order to create a strong eurozone. Fiscal monitoring is now being put in place. But there'll be other issues, such as the banking union.

There'll be other issues, such as a social welfare system we need. And Mr. Barroso just said these days that we need to look and see how we keep the social cohesion.

The welfare system is important for growth itself, not simply for social and value issues, for growth itself to be able to keep a younger generation educated, trained, and ready for moving to a more competitive Europe.

And I think these are very important issues, but it will take some time. And I think what we have seen, now, is austerity is one thing, but we also need reform. And they don't always go together. You need to make big changes.

If we have a company, for example, that isn't competitive, just cutting is not going to make it competitive. We need to do certain reforms. And this is what we're doing, for example, in Greece. Our tax system has had problems, but that's a reform question. That's not simply cutting or raising taxes.

FOSTER: OK.

PAPANDREOU: We have to hit tax evasion.

FOSTER: George Papandreou, we appreciate your time, as ever. Thank you very much, indeed, for joining us on the program. We can, now, join, hopefully, Lorenzo Bini Smaghi. He's a former ECB executive board member. Thank you very much, indeed, for joining us.

Sir, what's your response today? There was a dissenter on the board from Germany, saying this is nothing more than printing money, and there's some truth to that, isn't there?

BINI SMAGHI: Well, he's a dissenter. We all participate. I used to participate -- but we all participate in the ECB governing council on a personal basis. The nationality doesn't matter.

As a matter of fact, there are two Germans right now, and I think nationality doesn't matter. And opinions may diverge, but the important thing is 21 out of 22 were in favor. So I think it's an important decision which was taken, and the central bank has delivered, I guess.

FOSTER: OK, we're just going to listen to Jean-Claude Trichet, because he had some interesting comments to make about his time in the role. We're just going to listen to what he said, and it's about the message, really, coming out from the ECB.

(BEGIN VIDEO CLIP)

JEAN-CLAUDE TRICHET, FORMER PRESIDENT, ECB: It was decided at the very beginning that we would all speak with one voice because precisely it is sufficiently -- a sufficient challenge to have to cope with 17 countries. I personally regret that we could not stick to this one voice concept.

(END VIDEO CLIP)

FOSTER: If it was a problem in his time, it's even more of a problem now, isn't it? You need clear policy to encourage the markets, which is what the ECB seems so interested in doing right now.

BINI SMAGHI: I think the result today is clear. I think the ECB has announced a decision, and it's ready to act. And the fact that it is a 21 to 1 vote doesn't change anything, I guess.

FOSTER: In terms of the policy to responding to the markets, this fear -- this -- Mr. Draghi wants to address these distortions he talks about, "unfounded fears of investors." But why is he addressing unfounded fears? It's not his job.

BINI SMAGHI: Why not? The job of the central bank is to ensure the convertibility of the currency, and if the currency -- the existence of the currency is put into danger, it's the task of the central bank to reassure market participants and the people in general that the central bank is there to ensure that will be there.

So, unless you're -- one is naive enough to think that markets are always right, sometimes they describe the truth that sometimes markets are not right, and the central bank has to step in to correct the views of the market.

FOSTER: Unlimited bond-buying. Is that a big risk, or is that really just a message?

BINI SMAGHI: Well, unlimited means that the central banks doesn't put a limit to its own action. I think it doesn't mean infinite. So, I think it's a message to the markets that the central bank will do what is needed, and I think it's the right message.

If a central bank sets itself some limits, then the markets will try to see what the limits are, so it is the wrong message, if you want to stabilize the markets.

FOSTER: If the stock markets are a good measure, then certainly there was a good response to his speech today. How does he then build on this, though, to get some sort of momentum going in investor confidence?

BINI SMAGHI: Well, now I think the ball is really in the hands of the governments, because in order to intervene in the markets, the governments had to apply to the program and so now the ball is in the Spanish hands and the Italian hands that will say to see whether they are ready to and they are willing to apply for this kind of support.

FOSTER: OK. Lorenzo Bini Smaghi, thank you very much, indeed, for joining us on the program.

Now, a South African mining firm at the center of a deadly pay strike has drawn up a peace deal, but some unions are refusing to sign it. We'll hear from South Africa's trade minister in just a moment.

(COMMERCIAL BREAK)

FOSTER: Now, there have been developments in the violent pay strike by miners in South Africa. Lonmin has drawn up a peace accord and says some of the unions involved have signed up. Others are still holding out.

More miners were released from police custody today following last month's clashes, which left 34 people dead and 78 wounded. Lonmin has said that wage discussions must happen in an environment free of intimidation and violence.

The National Union of Mine Workers' Solidarity and the UASA had apparently signed the deal. Key players, including AMCU, the A-M-C-U, have not yet signed, according to the Congress of South African Trade Unions.

A little earlier, I sat down with the South African minister for trade and industry, and I began by asking what his government is doing to prevent a repeat of the tension and the violence.

(BEGIN VIDEOTAPE)

ROB DAVIES, SOUTH AFRICAN MINISTER OF TRADE AND INDUSTRY: As government, we have said that an incident like this would not have occurred in South Africa, and we're determined to do everything we can to make sure it doesn't happen again.

So, we're trying to address, I think, in a number of ways all the issues that gave rise to it, and also the responses that occurred when the incident happened. So, the first thing is, we've had the Judicial Commission of Inquiry appointed, which has got a four-month mandate, and has got to look at all the issues and come up with recommendations on a monthly basis.

And then, we have had a number of processes to try to address some of the labor relations matters. The last I've seen is that there has been an agreement on a peace pact by all parties except for the new player, AMCU.

But all the other parties have agreed on a peace pact and the attempts to ensure that the normal processes of labor relations and bargaining take place. This is where quite a lot of effort is being deployed at the moment.

FOSTER: There has been progress, as you say, but AMCU may not have signed up to it, but they are the crucial members, here, aren't they? They were involved in the initial images that were beamed around the world, shocking people. So, shouldn't you be dealing directly with them, trying to resolve their concerns?

DAVIES: Well, I think that is going to be a combination of also looking at the conduct and they're all in the -- some of the conduct that gave rise to the incident. I'm also --

(CROSSTALK)

FOSTER: When you talk about conduct, what do you mean?

DAVIES: -- also engaging with them. Well, before the shootings by the police, there were a number of murders of police people. There was quite a lot of violence that was involved before that. Who's responsible for that, I think, is something which the Judicial Commission of Inquiry is going to come up with.

FOSTER: Julius Malema is suggesting that these mines should be nationalized. He says he's sticking up for poor people who Jacob Zuma isn't anymore. He wants to threaten your government.

DAVIES: Well, I think that we are facing a challenge, now, with the change in the world economy that we cannot any longer expect a series of commodity super cycles and simply to prosper on the basis of rinse from dirt that we dig up from the ground and export to other people.

We've got to make more use of the mineral wealth in terms of adding value to it in our economy and creating jobs. That, I think, we are committed, as the ANC and as the government, to pursuing.

And that will require a broad-based set of policy interventions by the government, a strengthened role by the government in seeking that transformation in our economy. I have no doubt about that.

But that's something that's going to require serious work, serious development of policy programs, serious development of the instruments that are going to be used to bring about that change in the nature in which we use the wealth in our country.

(END VIDEOTAPE)

FOSTER: Now, CNN's Nkepile Mabuse spoke with one miner in Marikana who has chosen to return to work. His head is covered in this interview because he fears being hunted down and murdered for crossing the picket line.

(BEGIN VIDEOTAPE)

NKEPILE MABUSE, CNN INTERNATIONAL CORRESPONDENT: "Do you not fear being killed?" I ask.

"I know that they kill people who go to work," he responds, "but my personal circumstances force me to take the risk. The only support I have left in the world is my grandmother. Both my parents are dead, and my granny's taking care of my five siblings back home in the eastern cape. I have to send them money every month. We earn very little, so I cannot afford to stay away from work."

"How do you avoid being noticed?"

"I don't leave very early," he says. "I wait until everybody's up and about, and then I blend in. Most people think I'm just going to town. I wear my casual clothes and change into my work clothes when I get there."

"The bosses have made it clear," he says, "that they are applying a no work, no pay policy. I'm afraid, but I have no choice."

(END VIDEOTAPE)

FOSTER: And that's the story, there, of one miner in Marikana. The story continues to develop, and we'll bring you more on that as it does so.

Now, a Currency Conundrum for you. What are money notes made of? Is it wool or -- and polyester, or B cotton and linen, C silk and cashmere? We'll bring you the answer for you later in the program.

The dollar is up against the yen. It follows positives jobs date from the US. And the euro is up following the ECB bond-buying announcement. The pound is also up after the Bank of England froze interest rates.

(COMMERCIAL BREAK)

FOSTER: There's a rally underway on Wall Street tonight, very much encouraged by what they're hearing out of Europe, up 1.67 percent, currently, the Dow, 217 points. Bank of America and JPMorgan both up more than 4 percent or more, investors encouraged by the ECB bond-buying plan, and an upbeat jobs report also added to the momentum. So, very, very good day for the Dow.

Microsoft says people prefer Bing, meanwhile. In a blind test run by Microsoft, twice as many picked Microsoft's Bing results as the best over Google's, would you believe? Well, seeing is believing, and you can take the Bing it On Challenge yourself at bingiton.com.

This is it. It's a rather clever idea. Drinks companies have tried it in the past. What you do is put in a search query, so "car rental" we'll put in there. Two different lists come up, and you choose which you think is the best. So, if you think the results on the left were the best, you click on there.

Then you can try another one, "new Mars photos," for example. That comes up, you choose which you prefer, maybe on the right this time. And after you've put in five queries, you get the result, and it tells you whether or not you prefer the Google results or the Bing results.

Mike Nichols is the corporate vice president of Bing. He joins us now from New York. You'd better just explain the thinking behind this, because you obviously believe in your product.

MIKE NICHOLS, CORPORATE VICE PRESIDENT, BING: Yes, you bet. The -- it's a very interesting challenge, because people have a very habitual sort of use of Google these days. They've become accustomed to it, it's very much like tapping your foot in a meeting.

And we think that now is a great time for people to reconsider their choice in search engines, because we have a lot of research that shows that Bing's search results are higher quality than Google's. In fact, you cited one of the studies that talked about people, once you removed the brands, preferring the results from Bing.

And so, what we're trying to do is to get the word out about that. We think it's a great time for people to reconsider that choice and give Bing a try.

FOSTER: Isn't it going to be very subjective, though? Because there's not a good or a bad set of results, is it? It depends on the person putting the results in, and this is a bit simplistic, isn't it?

NICHOLS: Well, the challenge really, it's an interesting sort of issue, because what we've tried to do is to basically allow people to allow people to put in whatever query they decide that they want to submit. So, we don't preselect that for them.

We give you the choice as a user to say, hey, for the different kinds of things that I search for, which of the search engine's results do I actually prefer? And what the studies have shown is that people prefer Bing's over Google's nearly two to one.

And we realize that's rather surprising to people, so rather than just sort of rely on the research, we've created the tool that you referenced so that people can try it for themselves.

FOSTER: In terms of the overall results, when people look through them, they'll make their own decisions, won't they? But isn't the fundamental problem here that the Google brand is better than Bing? They trust it more, they like it more. Because Bing is a well-known name, isn't it? It's not that they haven't heard of it.

NICHOLS: It is a well-known name, and I -- well, Bing's awareness is reasonable. But I think that there is this very hard, sort of habitual sort of engrained perception that Google has some kind of search quality magic that no other search engine offers. And the facts are different. That's what the research suggests.

We realize this is a big marketing challenge for us, to try and change that perception with people by getting the facts -- getting them the facts, and we think that the most appropriate way to do that is just go ahead and create a tool, it's fun, very easy to go use it. Again, it's at bingiton.com. And then, everybody can make the decision for themselves.

FOSTER: Well, Mike Nichols of Bing, thank you very much, indeed. And he's right, you can make the decision for yourselves, so it's up to you, really.

In a moment, the art of decoding Draghi. We'll look at what the president of the ECB is laying on the table when it comes to bond-buying and his plan that we've been talking about, in plain English, of course. We'll translate when we come back.

(COMMERCIAL BREAK)

FOSTER: Welcome back. I'm Max Foster, these are the news headlines this hour.

A car in the French Alps where three people were found dead on Wednesday has been traced to an Iraqi British family. The family's neighbors in England described them as delightful. Two young girls survived. One of them is being treated for head trauma and a gunshot wound. A cyclist was also found dead nearby in the same parking lot.

Syrian opposition activists say 67 people have been killed across the country this Thursday. Amateur video appears to show residents of a town in Idlib province fleeing from recent shelling. The Syrian government has long blamed the violence on armed terrorist groups.

And South Africa has now released most of the miners who were detained when violence broke out during a strike last month. The men have been charged with murder after 34 miners were shot during a confrontation with police. Those charges have been dropped. Some unions are refusing to sign an agreement to get the striking miners back to work.

And the U.S. Democratic convention will reach its high point in the coming hours, when Barack Obama accepts his party's nomination for president and addresses the American people. Bill Clinton took the podium on Wednesday as the convention's keynote speaker. Former presidential candidate Senator John Kerry and Vice President Joe Biden are also expected to speak tonight.

The European Central Bank has unveiled the intervention it's been hinting at for weeks now. The bank's president says ECB will buy sovereign bonds in a bid to take the pressure off the Eurozone's economically troubled countries. Mario Draghi also says the bank won't cut its basic interest rate at this time to keep inflation in check.

(MUSIC PLAYING)

FOSTER: Mario Draghi's plan is for unlimited bond buying. The word unlimited, however, only applies to the quantity. In reality, there are several key limitations. Bond purchases will be subject to strict conditions, and each euro spent will be sterilized. This is a process based on tightly regulated transactions and a bit of old-fashioned elbow grease -- not my idea, I might add, but I went with it.

Here's Jim.

(BEGIN VIDEO CLIP)

JIM BOULDEN, CNN CORRESPONDENT: In any household, it's important to keep things clean and in working order. And when your house is the size of the Eurozone, it's even more important.

Hmm, it looks a bit bleak in here, a bit like the Eurozone.

So what has Mario Draghi done? Well, the obvious, it's time to replenish.

Draghi's goal was to bring yields down by buying government bonds. That helps restore confidence as, on the surface, it looks like the Eurozone's house is in better order. The result, though, is new euros in the system. But there's a problem.

It's not just the fact that they're dirty. It's that there are too many cups. And the same can be said for the euro. As the money supply goes up, the value may fall. So Draghi needs to take them out of the system.

If he doesn't clean them quickly, you have quantitative easing, good for the Fed and the Bank of England but Draghi can't take the risk. So to stop his kitchen from being flooded with cups and Europe with euros, he only has one choice: sterilize them.

The final result, we had the same amount of cups we started with, though admittedly cleaner and more appealing, and the supply is stable. It's complicated, but for Central Bank, it's just housekeeping -- Jim Boulden, CNN, London.

(END VIDEO CLIP)

FOSTER: What can I say? Well, we've had the European reaction to Mario Draghi's plan. Now let's go to the United States. Robert Wolf is an outside economic adviser to President Barack Obama. He's also the current host of Reuters' impact players, which launched today on YouTube.

Robert joins me now from the Democratic National Convention in Charlotte in North Carolina.

Thank you so much indeed for joining us. And we mentioned it yesterday, I mean, this European story is so big, has a huge effect, doesn't it, on the U.S. economy as well. But it's not really part of the presidential debate, is it?

ROBERT WOLF, OUTSIDE OBAMA ECONOMIC ADVISER: Well, I definitely think there's been a bifurcation between the direction in the U.S. and the direction in Europe. But certainly I think today's news hopefully keeps Europe out of a recession and really gets the momentum going again, keeps the euro a little stronger and maybe gets the markets a little more vibrant over there.

I think we have something very different going on in the U.S., where there's been real economic stability. And now we're just working on getting the growth trajectory, I would say, more robust.

FOSTER: It's a really big test, isn't it, for President Obama tomorrow, because the economy is fragile. People are feeling it in the U.S. But as long as he can keep things stable, he's on quite a sure footing, isn't he, because presidents are defined by the economy these days. So what can he say to really up his game on the economic agenda tomorrow?

WOLF: Well, I think, one, he'll be speaking tonight and he should talk about the facts, similar to what President Clinton did last night. I mean, to compare where we were when he entered office and where we are today, it's night and day.

We lost 4 million private sector jobs the prior six months before he entered office. We've had 29 straight private sector job gains equating to 41/2 million private sector jobs.

On the flip side, prior to him entering office, that month in January of '09, we lost 800,000 jobs. That was the largest job loss in 60 years. So the trajectory that we're going on, whether it's the comeback of the auto sector, the best manufacturing we've had in 15 years, export at a two -- exports at a two-decade high, we have a lot of positive things going.

But by no means am I saying that we're happy where we are today. We just need to make sure we continue to move the way we're moving.

FOSTER: And how do you knock or find the flaws in Romney's economic policy, because he does whatever people think of his business credibility, he seemed to have a business brand.

WOLF: Well, no disrespect to the governor. I listened to his speech last week and I really didn't hear his economic vision. I heard about raising -- lowering taxes on the wealthy and literally that would increase our deficit to $5 trillion, if you can combine that and what he wants to do in increasing spending with respect to military.

So I didn't really hear his vision on getting private sector jobs back. I didn't hear any vision with regard to manufacturing, innovation, entrepreneurship, technology, a lot of things that the president has been speaking about for the past two years. So you know, I think the president's plan's very straightforward.

It's getting the private sector back going again and getting this economic economy moving in a positive direction, hopefully where we get GDP growth back to north of 3-4 percent. And a lot of that's going to be depending on the housing market, which I'm happy to say foreclosures are at a four-year low. And housing starts are now at a four-year high.

FOSTER: Robert Wolf, thank you very much indeed for joining us.

Now after the break, we'll have the answer to today's "Currency Conundrum" for you.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

(BEGIN VIDEO CLIP)

FOSTER (voice-over): Now for the answer to the "Currency Conundrum," earlier I asked what the -- what are money notes especially made of? The answer is, it's B, cotton and linen. Money notes are not made of paper as you might think. U.S. notes are 75 percent cotton fiber and 25 percent linen.

(END VIDEO CLIP)

FOSTER: Let's find out what the weather has in store now, because Jenny's been mentioning my town which is from a holiday in Europe, and apparently it's spreading, the hot weather.

JENNY HARRISON, CNN METEOROLOGIST: The town? The town's spreading?

Yes --

(CROSSTALK)

(LAUGHTER)

HARRISON: You will be able to tough up your town this weekend, Max. The heat is spreading, you're quite right, pushing into the western Europe, northern Europe as well.

Now in the meantime, in fact, quite a bit of rain (inaudible) across northern sections of the U.K., across (inaudible) Scandinavia, some snow in the mix there as well, (inaudible) the mountains in Norway, and then that area of low pressure, which was sitting very stubbornly through the central Med, that's finally beginning to push eastwards and actually fizzle out as it does that as well.

But you can see the rain coming down from the northwest, some heavier spells at times and thunderstorms as you can see heading across towards Germany and also of course into Denmark. But this is what will be the most dominant feature of the weekend, high pressure. And it will bring that warm air up from the south, the southwest, so really spilling across most regions.

So a nice few days ahead, in fact, so nice temperatures well above average. Look at this, Madrid, which we typically think of as being fairly warm anyway. But the average is only 26 this time of year, 32 Celsius for the next couple of days, London the average is 19, by Sunday 26 degrees Celsius and Paris you go even better than that, 30 Celsius on Sunday.

So 9 degrees above your average of 21 degrees Celsius. There is a little bit of cloud around as well, but for the most part it really obviously just clears sunny skies, one or two very lightly scattered showers, a little bit more in the way of rain parting across more northeastern areas of Europe and that, of course, is also where the temperatures are a little bit lower, still close to average, but really elsewhere look at it. It is going to be above average, some good sunshine and really nothing there in the way of rain, 24 the high in London then on this Friday.

Tomorrow and then 25 in Paris, 29 Celsius in Rome now that that cloud and rain has gone. Now we're still watching the Gulf of Mexico. This, believe it or not, the remnants of what was Hurricane Isaac, pushed back out to these warm waters. So the National Hurricane Center are giving this a 40 percent chance of developing.

And meanwhile to the northeastern U.S., the last few hours, some fairly heavy rain there, some thunderstorms. That as well the remnants of what was Hurricane Isaac. By the way, if that system in the Gulf does develop, it'll be called something else. Right now we're looking at Leslie, Hurricane Leslie, category 1, and Michael, category 3 hurricane.

This has developed literally in the last 12 hours. First of all, Leslie, well, this has just been sitting out there in the Atlantic, barely moving, just to the north of 4 kilometers now. Winds 120 kilometers an hour. We do expect to see some strengthening, but not a lot of movement for the next couple of days.

Eventually it should take an eastern track from Bermuda, as you can see that all of these different computer models are in agreement. But the wind's just sitting there, sitting there. Eventually at the end of this 48-hour period, we should begin to see the impact of those winds, but the rain will stay pretty much around the center and of course that means the accumulations as well.

So windy in Bermuda, but no real rain. And then this is the forecast track for both of them, Michael, as you can see, again, a slow-moving storm, but it's way out there in the open waters of the Atlantic. In the meantime, Max, a nice weekend for you in store.

FOSTER: Fantastic. Thank you very much, Jenny, some good news.

Now the new Nokia Lumia phones are getting a lot of attention. We reported on them yesterday. But the attention really at the moment is for all the wrong reasons. The product launch yesterday, Nokia showed this video to compare the Lumia 920 camera to a rival high-end smartphone. It was impressively smooth compared to the competition.

The only trouble was it was faked. Eagle-eyed observers spotted the reflection of a camera man holding a full-sized camera.

Nokia says it's sorry for any confusion and techie tweeters are not impressed. Stephen Mellish, head of Mobile Radical Company, writes, "Oh, dear, Nokia, not only have you not learnt about product launches with no launch date, you fake the product, too!"

Wikipedia founder Jimmy Wales tweeted, "It's depressing to see a once great company in moral and economic collapse. Nokia, pull yourselves together!"

And the "Huffington Post" tech account wrote, "Why did you have to fake it, Nokia?"

A shame, because there was quite a lot of good publicity around it yesterday. But that is QUEST MEANS BUSINESS. I'm Max Foster in London. Thank you for watching. MARKETPLACE EUROPE (inaudible) here on CNN.

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JULIET MANN, CNN HOST: Welcome to MARKETPLACE EUROPE. I'm Juliet Mann in London. From the Queen's Diamond Jubilee to the Olympic Games, it's been a summer of celebration here in the U.K. But recent data shows that that hasn't translated into a summer of spending. It's the same story across Europe as consumer confidence continues to fall.

This week, we look at how businesses have been reacting and adapting to meet the challenge.

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MANN (voice-over): Coming up, I head to a wine fete in London for a taste of how the industry is compensating for falling demand in traditional markets. And I speak to the CEO of Visa Europe, who tells us about payments of the future.

UNIDENTIFIED MALE: In the time it would take Usain Bolt to run the 100 meters, we could process over 12,000 transactions coming from these mobile devices.

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MANN: Europe's native wine-producing countries are all experiencing a drop in domestic demand, while exports to newer markets in Asia are growing. The attitude of the European wine industry is that rather than their glasses feeling half-empty, they're half-full.

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MANN (voice-over): There's a buzz at this London wine trade fair.

While consumers may be drinking less in France, Italy and Spain, because tough economic times mean they've less to spend on life's pleasures, Europe's major wine producers are looking beyond those traditional markets. And China in particular is a thirsty customer.

RICHARD HALSTEAD, WINE INTELLIGENCE: China represents effectively the biggest growth prospect that the wine industry's had probably for a generation. The interesting thing and the work that we do in China right now is really centered around actually how wine works in the culture there, and what expectations the consumer there have about wine as a product.

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MANN: They could focus on a wine with a heritage and a region with a good reputation.

Or something from an emerging wine market.

It could be the taste (ph).

Or perhaps it's what the label looks like.

MIACARENA ALICALTA (PH), EXPORT MANAGER, PAGO LOS BALANCINES: I think the consumer will go to your wine because of your label for the first time. The second time, he buys your wine it's because he likes what is inside the wine.

Crash Wines were born in 2010. They can only (inaudible) only bad news (ph). Also the real estate bubble explosion so we want to support (ph) an optimistic point of view.

MANN (voice-over): Also with a nose for opportunity is a Greek wine importer. She said it's time to take Greek wine seriously.

MARY PATERAS (PH), ECLECTIC WINES: The Greeks don't have a lot to export, apart from oranges, tomatoes, (inaudible). It is a product for export (inaudible). And their wines have got better and better (inaudible) so they are doing well.

They've managed to get their foot into China, which, for them, is great. They're doing well in America and in Canada. One of the wine makers used his money to export to Australia. So for the economy, it's good.

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MANN (voice-over): The Europe's old and newer wine producers looking outside local markets makes business sense. European Union exports to non- European countries who are at the 12.7 percent in 2011. Exports to China saw the biggest increase of 49 percent. Hong Kong was up 28 percent. And exports to the U.S. were up 14 percent.

Some believe the current economic crisis in Europe could even boost growth in the wine sector.

HALSTEAD: If the euro weakens significantly, if there is a loss of confidence in the euro, actually that might be something that wine producers might find positive, because it'll make them instantly much more competitive in some of the third-party export markets, such as the United States or indeed Asia.

MANN (voice-over): And there are plenty of takers here who'll drink to that.

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MANN: Coming up after the break, I speak to the CEO of Visa Europe, who predicts that in less than a decade, half of all the transactions that we make will be on devices like this one.

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MANN: Welcome back to MARKETPLACE EUROPE. The sales are still on (inaudible) across the British retail sector show that on high (ph) streets like this, consumer spending continues to slide. Yet Visa Europe says its business is booming.

Using technology which enables customers to keep a better track of their spending as consumers move further away from checks and cash into faster, more efficient forms of payment.

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MANN (voice-over): Every one in eight euros spent is on a Visa card. It's owned, controlled and operated by its members across 36 countries. And as it pushes towards more convenient forms of payment, it's issued 37 million contractors' (ph) cards in Europe.

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PETER AYLIFFE (PH), CEO, VISA EUROPE: I've been in retail banking and payments for about 38 years, and this is the most exciting time to be involved in payments. It's all about these wonderful devices that suddenly appear, these smartphones. It radically changing the way that payments are going to operate going forward.

MANN: So you're saying the key trend for 2012 is one of the future? It's cashless?

AYLIFFE (PH): Yes, I think so. One of the things that -- we'll never go cashless, OK? Because people will always choose how they want to pay. If they want to pay by cash, if they want to pay by card in the future, that's absolutely fine with me. But what we're trying to do is say there's a much more convenient way to pay. That's where these smartphones really come in.

And so we see the future -- and I've made this prediction that by 2020, more than 50 percent of our transactions are going to be on mobile phones. We'll just -- we're the enabler. So what we are trying to do is get that infrastructure in place as quick as we can. It is costly. It is time-consuming to get it all (inaudible) in place.

You know, you've got to get every retailer to kind of change their front-end systems so as it can accept a contactless payment. You've got to get every bank to then start issuing contactless cards. You've got to work with the mobile phone operators and the handset providers to really put all that infrastructure in place.

Nothing in payments happens quickly. But every now and again, you see an opportunity that you think this is such a fantastic opportunity and we really, really must leverage it.

MANN: What about the current economic environment? People are much more aware of what's in their pocket. While you've got that, is it not going to affect your business plan, too?

AYLIFFE (PH): The really, really fortunate position that Visa's in is that we are continuing to see very strong growth in our business. You're absolutely right. The consumer's been very careful about what they're spending nowadays. But what's happening is the consumer is moving away from inefficient forms of payment, like using a check, like using cash, sort of much more convenient and efficient ways of paying. So that's why Visa's continuing to see substantial growth in its business because it's the convenience factor of using the more efficient forms of payment.

MANN: You generate all of your revenues, all across Europe. Doesn't that make you quite vulnerable in (inaudible)?

AYLIFFE (PH): The fact we're operating across 36 territories across Europe actually, I think, you know, helps us, assists us in terms of the growth of our business. You know, there's still some very strong growing markets.

And a lot of them are very immature in terms of payments. So therefore, what's happening is they're growing so much faster than some of the mature territories. Turkey, for example, fantastic country and the growth that we're seeing there.

Poland is actually the fastest growing country in terms of contactless payments and the infrastructure, which enables mobile devices to kind of be used as well. So, no, I think it's the spread, actually is the big benefit in the Visa has to continue the strong growth that we're seeing.

MANN: You've got quite ambitious growth targets, and I know your line has been (inaudible) Europe is cautiously optimistic. Where are the biggest challenges coming from?

AYLIFFE (PH): Probably that one thing as I see you're worried about is someone is looking at that tremendous growth that you've got and looking to disintermediate you in the marketplace, OK? So I'm very conscious of that.

But that's what keeps us going. That's what keeps us hungry for (inaudible) change. We are the number one payment provider across Europe. We absolutely are committed to staying as number one. And that means we have to keep driving change. We can't just sit back.

MANN: Is it the usual suspects snapping at your heels? Or are they (inaudible) coming from (inaudible)?

AYLIFFE (PH): Yes.

MANN: Where are they coming from?

AYLIFFE (PH): A lot of is new entrants into the payments market. Some of them are kind of new entrants into payments who are, in one part of the space are actually working us jointly, and in another part of the space, I realize, could disintermediate us. So you know, you look at some of the providers, like the Googles, the Facebooks, the Amazons and everything else.

But we work with all those people. At the same time, they're changing the shape of business and the way we might look at it in the future. So it is exciting to kind of work with someone who you know and might be, you know, a partner today, a competitor tomorrow.

MANN: Didn't realize that the payment industry was so political, because it sounds you're constantly working out who you'd better hook up with.

AYLIFFE (PH): New technology changes a marketplace. And (inaudible), for 50 years, you know, we've had the piece of plastic. Now, OK, it's developed; it's been more secure. We've added features to it and everything else.

But for 50 years, I've carried a piece of plastic around, you know. Now suddenly I'm realizing I don't need in the future to have that piece of plastic because it's (inaudible). It's on this wonderful smartphone, you know, so radically that changes your thinking. And the way other players look at the market.

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MANN: Peter Ayliffe (ph), the CEO of Visa Europe there.

Well, that's it for this edition of MARKETPLACE EUROPE. Do join us again next week. Goodbye.